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© Nigel Slack and Michael Lewis 2003
Quality
Per
form
ance
o
bje
ctiv
es
Dependability
Developmentand Organization
(Product and service development and
improvement)
Speed
Flexibility
Cost
Resource Usage
Mar
ket
Co
mp
etit
iven
ess
Decision areas
Issues covered in this chapter
Capacity Supply Network
Process Technology
Issues include:
• Relating product and process development
• Managing product/service development as a process
• Meeting market requirements for new products and services
• Managing product/service development resources
© Nigel Slack and Michael Lewis 2003
Increased competitiveness
Shortened life-cycles
Fragmented markets
Rapid technology
change Means of building
capabilities
Involves all parts of the business
The increasing strategic importance of product and service development
OPERATIONS RESOURCES
MARKET REQUIREMENTS
Product and service
development
© Nigel Slack and Michael Lewis 2003
Development of the
Service
Development of the
Process
Development of the
Product
Development of the
Process
In most service operations the overlap between service and process development is
implicit in the nature of service
In manufacturing operations overlapping the activities of
product and process development is beneficial
© Nigel Slack and Michael Lewis 2003
Products and services should be developed in
such a way that they can be created effectively
Processes should be developed in such a way that they can create all products
and services which the operation is likely to introduce
Decisions taken during the development of the product or service will have an impact on the decisions taken during the development of the
process which produces the product or service or vice versa
Developing the Product or
Service
Developing the Process which Produces the
Product or Service
The development of products/services and processes are interrelated and should be treated together
© Nigel Slack and Michael Lewis 2003
Product/service development is itself a process
TRANSFORMED RESOURCES
Technical informationMarket informationTime information
TRANSFORMING RESOURCES
Test and design equipment
Design and technical staff
INPUTSTHE
DEVELOPMENT ACTIVITY
OUPUT FINISHED DESIGNS
© Nigel Slack and Michael Lewis 2003
Introducing ……… the Ballpoint Pen
1939 Hungarian brothers Ladislao and Georg Biro file patent and in 1944 produce first commercial ballpoint pen.
Eversharp buy US distribution rights.
Before first shipment, Milton Reynolds’ copy product on sale in US (also retractable).
Legal wrangles unearth Biro brothers’ 1939 patent preceded 50 years earlier!
Reynold enjoyed early success but quality problems undermine market image.
Both Eversharp and Reynolds go bust.
Parker introduce reengineered product to overcome some reliability problems.
Parker reasonably successful with mid-price product.
French company Bic make further product modifications and overcome mass production problems.
Bic make the product ‘consumer disposable’ and change the pen market.
© Nigel Slack and Michael Lewis 2003
Product/service and process development - the Ballpoint pen
New Core Process
Next Generation
Process
Redesigned Processes
Minor Modifications
Add-ons and Enhancements
Extension of Product/Service
Range
Next Generation Product/Service
New Core Product/Service
Degree of Product/Service Change
De
gre
e o
f P
roce
ss
Ch
an
ge
Research and Advanced
Development
Eversharp
Bic
Parker
Reynolds
Biro Brothers
© Nigel Slack and Michael Lewis 2003
‘Pioneer’ Process
Developments to Process
Extension to
Processes
Modifications
to Process
Modification to product/service
Extension to product/service
Development of product/service
‘Pioneer’ product/service
The link between product/service and process development can be closer in service industries
Deg
ree
of
pro
cess
ch
ang
e
Research and
advanced development
Internet banking service
Call-center banking service
Branch banking service
Incr
easi
ng diff
iculty
Incr
easi
ng diff
iculty
Degree of product/service change
© Nigel Slack and Michael Lewis 2003
Degree of Product/Service Change
Deg
ree
of
Pro
cess
Ch
ang
eResearch
and Advanced
Development
Internet banking service
Call-center
banking service
Branch banking service
Boundary for service operations
Volvo 1970s and 80s
The ‘Mini’ 1960
Boundary for manufacturing
operations
New Core Process
Next Generation
Process
Redesigned Processes
Minor Modifications
Add-ons and Enhancements
Extension of Product/Service
Range
Next Generation Product/Service
New Core Product/Service
© Nigel Slack and Michael Lewis 2003
Quality - Error free designs which fulfil market requirements
Speed - Fast development from concept to launch
Dependability - Designs delivered to schedule
Flexibility - Designs which include latest ideas
Cost - Designs produced without consuming excessive cost
Capacity - Amount of development resource matched to demand over time
Supply Network - Relationships with outside sources of development knowledge
Process Technology - Provision of design technology (CAD), expert systems, etc.
Development and Organization - Organization of development resources and improvement strategy.
Per
form
ance
Ob
ject
ives
Mar
ket
Co
mp
etit
iven
ess
Resource Usage
Operations strategy for the product and service development operations
Decision areas
© Nigel Slack and Michael Lewis 2003
Concept generation
Concept screening
Preliminary design
Design evaluation and improvement
Prototyping and final design
Developing the operations process
A typical ‘stage model’ of the product and service development process
© Nigel Slack and Michael Lewis 2003
Reliable/resilient
Accurate
Fast
Responsive
Secure
Remote links
Connectivity
Scalability
Absolute importance
Relative importance
Technical difficulty
Imp
ort
an
ce
to
c
us
tom
er
Av
ail
ab
ilit
y
R-3
co
nfo
rmt.
Pa
ss
wo
rd x
2
Intr
an
et
co
mp
ati
bil
ity
M
em
ory
re
qu
ire
me
nt
Da
tab
as
e
Inte
rfa
ce
s
Fir
ew
all
s
HOWs
1 2 3 4 5Competitive score
1 =
Min
imu
m
X =
Us
A =
Co
mp
eti
tor
A
B =
Co
mp
eti
tor
B
5 =
Ma
xim
um
B
B
B
B
B
B
B
B
A
A
A
A
A
A
A
A
X
X
X
X
X
X
X
X
98 48 72 54 9 90 54 78
1st 7th 4th 5th 8th 2nd 5th 3rd
4 3 2 2 1 5 4 3 1 = easy, 5 = difficult
9
10
7
4
8
6
5
2
WHATs
Strong relationshipMedium relationship
Weak relationship
931
WHATs vs HOWs
Strong positivePositive
NegativeStrong negative
HOWs vs HOWs
A Quality Function Deployment (QFD) Matrix
© Nigel Slack and Michael Lewis 2003
Design characteristics
Relationship matrix
Cu
sto
mer
re
qu
irem
ents
Trade-offs
Component characteristics
Relationship matrix
Des
ign
ch
arac
teri
stic
s
Trade-offs
Process characteristics
Relationship matrixC
om
po
nen
t ch
arac
teri
stic
s
Trade-offs
Individual activities
Relationship matrix
Pro
cess
ch
arac
teri
stic
s
Trade-offs
‘House of quality’
Component deployment
Process planning
Activity planning
QFD matrices can be linked with the ‘hows’ of one matrix forming the ‘what’ of the next
© Nigel Slack and Michael Lewis 2003
Uncertainty Regarding the Final Design
Certainty Regarding the Final Design
TIM
E
Product/service development involves progressively reducing the number of possibilities until the final design is
reached
Choice and evaluation "Screens"
CONCEPT
FINAL DESIGNSPECIFICATION
Large Number of Design options
One Design
© Nigel Slack and Michael Lewis 2003
Many concepts enter the development process
One ‘best’ design emerges
Customer’s original
specification
One recycle (sometimes) Discussions
with customer
Expansion of original
idea
Narrowing of options for customer
Mutually agreed
development specification
Development of agreed design
(a)
(b)
(a) The idealised development funnel; (b) one company development funnel
© Nigel Slack and Michael Lewis 2003
Delay in breakeven
Time
Cash Sales RevenueCumulative cash flow
Sales revenue (delayed launch)
Cumulative cash flow (delayed launch)
Delay in launch
Slow and/or delayed development times, which can be the result of quality or flexibility failure, will increase costs and can reduce revenue
© Nigel Slack and Michael Lewis 2003
Confirmed development need only in the short-term
Reluctant to invest in long-term development
resources
So in the short-term the project runs into
problems
Lose business opportunities
The ‘vicious cycle’ of under resourcing development capacity
© Nigel Slack and Michael Lewis 2003
In-house design capability Outsourced
design capability
Close, but loose
Distant, through contracts
Control of resource
StrongWeak in the short-term, potentiallystronger in the long-term
Familiarity
High Low/limitedAccessibility
Fixed VariableCost
Small Great (Potentially)
Risk of knowledge leakage
The in-house-outsourced continuum
© Nigel Slack and Michael Lewis 2003
RESIDENT CUSTOMER ENGINEER
Focus – helping suppliers to develop their products at supplier’s sites, to meet customer needs
GUEST DESIGN ENGINEER
Focus – helping the product design effort at the
customer’s site by bringing supplier product and process knowledge
SUPPLIER DEVELOPMENT ENGINEER
Focus – helping suppliers at their site to improve
production methods
RESIDENT PRODUCTION ENGINEER
Focus – helping the manufacture of customer’s products through knowledge of, and changes in, supplier products
Supplier located (employee of customer)
Customer located (employee of supplier)
Largely concerned
with product development
Largely concerned
with process development
A broad typology of guest engineers
© Nigel Slack and Michael Lewis 2003
INCREASING PROJECT
ORIENTATION
Balanced matrix
Project matrix(Heavyweight project managers)
Project 2
Project 3
Project team(‘Tiger’ teams)
Function Function Function Function
Functional organization
A B C D
Project 1
Functional matrix(Lightweight project managers)
Project 2
Project 3
Project 1
Function Function Function Function
A B C D
Function Function Function Function
A B C D
Function Function Function Function
A B C D
Project 2
Project 3
Project 1
Project 2
Project 3
Project 1
Organizational structures for product/service development
© Nigel Slack and Michael Lewis 2003
Safety
Quality
Flexibility
CostPer
form
ance
Ob
ject
ives
Mar
ket
Co
mp
etit
iven
ess
Resource Usage
Decision areas
Operations strategy matrix for Project Orlando
* * *
* **
** *
*Capacity
Size of team?
Supply Network
Subcontract any development?
Process Technology
Build pilot plant?
Development and organisation
Dedicated team?
No significant relationship.
Is the company willing to subcontract any responsibility for safety?
Pilot plant may enable potential hazard to be detected.
Dedicated team may help reinforce safety objective.
No significant relationship.
Strict quality standards need to be communicated to any subcontractor.
Pilot plant may enable better quality learning.
Dedicated team may help to reinforce quality objective.
Need to have development capacity to respond quickly to accelerated development needs.
Does subcontractor development imply reduced flexibility?
Pilot plant would be dedicated so increase flexibility, but may have scale-up problems.
Dedicated team likely to be more flexible if all necessary skills are represented in it.
Very significant, the larger the development team the higher the cost of development.
Subcontracting development to specialists may reduce total development cost.
Pilot plant is likely to be more expensive that using partners’ capacity.
Dedicated team likely to be more expensive, functional organisation usually gives higher utilisation of staff.
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